Flights of fancy: The rise and rise of premium flying

Indians are opting to fly premium more often, especially on metros routes, as they seek better experiences and business travel grows. That’s sent fares for such seats on aircraft soaring through the roof.

Overall demand for business class and premium economy seats on aircraft has increased 50-60% over a year earlier, revealed data by travel portals MakeMyTrip, EaseMyTrip & Thomas Cook India. According to industry executives, airfares for the category have nearly doubled in a year.

“We’ve seen a strong demand for business and premium economy-class bookings as compared to 2023, driven by factors such as the growing aspirations of India’s middle class, corporate travel policies emphasizing employee well-being and shift towards enhanced travel experiences,” said Indiver Rastogi, president & group head, global business travel, Thomas Cook India, told Mint.

In India the business class makes up 5-6% of the total market, say industry insiders. That compares with 9.2% of the total seats, globally, according to CAPA, providing a big opportunity for domestic carriers. Airlines like Air India and IndiGo have collectively over 1,400 aircraft on order and expected to growth their business class offerings.

IndiGo, which launched the category on domestic flights starting November, plans to expand it to 45 flights in 2025.

While demand for business class on domestic routes has increased 27% year-on-year, demand for international travel surged 80%, showed data shared by MakeMyTrip.

Metropolitan routes such as Delhi-Mumbai and Delhi-Bengaluru are seeing a major demand for business-class travel, according to EaseMyTrip.

“The Delhi-Mumbai sector alone is seeing the implementation of premium seating on 20 daily flights, with carriers like IndiGo planning to add over 150 premium seats to meet growing demand,” said Nishant Pitti, CEO & co-founder at the company told Mint. “The Delhi-Bengaluru route emerges as the second most significant business corridor, with airlines introducing business class configurations across 15 daily flights.”

Competitive pricing

According to travel portals, current market data indicates competitive pricing after IndiGo launched its premium seats last month. Industry experts, however, say Air India is well positioned to hold a 55% seat capacity post-Vistara merger, targeting high-demand business sectors with premium service offerings.

“Ticket pricing is expected to be intense, as new entrants establish benchmark rates between ₹18,000 and ₹20,000 on key routes. This pricing strategy aligns with premium economy fares while maintaining a distinct differential from traditional business class rates,” Pitti told Mint. The fare trend shows seasonal variations, with November maintaining moderate pricing levels compared to December’s peak season rates.”

According to Thomas Cook India, the average business class airfare for domestic cities is between ₹45,000 and ₹75,000 for bookings made 15 days in advance. For tickets booked seven days ahead of the travel date, it is between ₹50,000 and ₹85,000.

“To maximize their travel, value-seeker travellers are utilizing off-season discounts from airlines, as well as special offers and complimentary add-on benefits, to avoid last-minute surges,” said Thomas Cook India’s Rastogi.

Value addition on offer

Airlines are introducing value-added services and enhanced in-flight experiences to justify fare structures. The trend suggests a move toward more accessible premium travel options while maintaining service quality differentials.

The average airfares for business class have almost doubled from ₹20,000-30,000 in 2023, according to Ajay Prakash, president of the Travel Agents Association of India (TAFI).

“It is bizarre” to see domestic business class seats priced between ₹70,000 and ₹80,000, he said. “There needs to be some rationalization. The government needs to talk to airlines and understand the reason behind such exorbitant ticket prices. If there is a genuine reason, then the government needs to step in,” he said.

“At the price of a business class seat on domestic routes, one can comfortably fly to Dubai or Vietnam. At such high prices, we are driving traffic away from our country to other countries,” Prakash said. “It is not only domestic tourists; inbound international traffic is also affected by ticket prices. We need to look at tourism as a whole. One needs to have a balanced inbound, outbound, and domestic tourism.”